|Roman Catholic Diocese
of Tucson Files for Bankruptcy over Abuse Cases
By Arthur H. Rotstein
September 20, 2004
TUCSON, Ariz. - The Roman Catholic Diocese of Tucson filed for bankruptcy Monday, becoming the second U.S. diocese to seek court protection because of the cost of clerical sex abuse cases.
Tucson Bishop Gerald F. Kicanas told parishioners in a letter that filing the voluntary petition for Chapter 11 bankruptcy reorganization offered "the best opportunity for healing and for the just and fair compensation of those who suffered sexual abuse by workers for the church in our diocese."
But a plaintiffs' attorney said the church was going into bankruptcy partly as a public relations move aimed at making victims appear overly aggressive.
Financial operations of the Tucson Diocese will now be subject to court scrutiny for the first time, potentially opening the way for non-church interference. Kicanas told parishioners in June that bankruptcy appeared to be the only option remaining for the diocese, which serves 350,000 Catholics in more than 70 parishes.
The Tucson Diocese settled 11 abuse lawsuits filed by 16 plaintiffs for an undisclosed sum two years ago, and by the latest count, 22 more molestation claims with 34 plaintiffs have been brought against the diocese.
According to its financial statement, the diocese had $4.65 million in long-term debt and a $7-million deficit in unrestricted net assets as of June 30.
The Portland (Ore.) Archdiocese became the first American diocese to file for bankruptcy on July 6. The Boston Archdiocese and Dallas Diocese both considered filing for bankruptcy because of abuse cases but avoided doing so.
Kicanas said his diocese will continue working toward settlements in the cases against it, despite the filing.
However, "I could not have agreed to a settlement if it would have meant stripping the diocese of everything and thus limiting our ability to respond to the needs of others who have been hurt who may come forward in the future," the bishop said.
The reorganization plan calls for most creditors to be paid through the diocese's regular operation. Plaintiffs in sex abuse cases, however, would be paid through a special pool, said Susan Boswell, the bankruptcy attorney for the diocese.
The pool would include $3.2 million from the diocese in addition to money contributed by insurance companies and others the diocese believes should share responsibility, she said. It is not clear how large the total pool would be.
Abuse victims could either seek a jury trial or a judgment from a court-appointed official on their claims.
Plaintiffs' advocates saw the filing as an attempt to deflect responsibility.
The church "is using this bankruptcy as a public relations tool to make the victims appear to be the predators of the diocese," victims' attorney Lynne Cadigan said.
In Chicago, Barbara Blaine, president of the Survivors Network of those Abused by Priests, said "hundreds of cases have been settled (elsewhere) by bishops who decided to put healing first. And we think that's what's really important."
Plaintiffs' lawyers believe the diocese has enough money to settle the cases now pending. They filed a motion recently in Yuma County Superior Court seeking to block the diocese from transferring properties to affiliated Catholic bodies before a trial scheduled later this month.
Cadigan and law partner Kim Williamson said plaintiffs discovered that the diocese had transferred five properties between March and June.
"Such transfers may be designed to remove assets from the diocese in advance of a trial ... in an attempt to shield such assets from collection efforts" if the plaintiffs were to win damages, the motion said.
Kicanas denied that the property transfers were an attempt to protect assets. He said they were long-planned steps to help finance new school buildings.
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